Canada sees over $12B in demand for its green bond debut
BNN Bloomberg
Canada racked up over $12.3 billion in orders for its first green bond sale, allowing the North American country to price it at cheaper terms than a regular security.
Canada racked up over $12.3 billion (US$9.75 billion) in orders for its first green bond sale, allowing the North American country to price it at cheaper terms than a regular security.
The investor demand is enough to cover the $5 billion transaction more than twice, according to people with knowledge of the matter. The deal is being priced to yield 0.5 basis points over a Canada bond due in June 2029, said the people, a price advantage -- or greenium -- of 2 basis points compared to a similar conventional security.
Canada, the world’s fourth largest oil and fifth largest natural gas producer, is pricing the first green bond transaction after a week-long marketing effort at a time when governments and investors worldwide digest the geopolitical consequences of a war pursued by Russia, a major energy supplier.
Canada is excluding activities including transportation, exploration and production of fossil fuels as well as nuclear energy from the potential use proceeds of its green bonds “in recognition of the exclusionary criteria embedded in major green bond indices and green investor and market expectations,” the government said on its website.
The deal’s order book includes $1.25 billion from joint-lead managers, according to people familiar with the matter. A press officer for Canada’s government didn’t provide immediate comment.
